Colombo, the capital city of Sri Lanka, is now becoming a hub of retail. The coastal city has in past 2-3 years after the rein of LTTE chief came to an end, has become a better place to do business. With better liberated government and government laws, retail can now be looked at on a positive note.
Retailer got an opportunity to travel across the city and understand the retail scenario of the city.
Colombo retail market
The Colombo retail market, in fact the complete Sri Lankan retail market is full of local brands. These brands are able to offer products which are majorly produced locally or sourced across the globe. There is still a dearth of Indian and international brands in the country especially in standalone presence. A few local retailers including Odel, Hameedia and others have successfully been able to bring in a few international brands. What has been a hindrance in bringing in international brands are the high duties that are applicable in the country. There was a time when duties were as high as 300 per cent which now stands at 100 per cent.
The city only has one international brand which has a standalone store which is Mango, while I could get my eyes on an Indian service brand VLCC in the country, rest all were local retailers.
What is commendable is the that local retailers have ensur
ed a good retail experience for consumers with well designed and strategized stores, time to time collections, other services within the stores including cafés and others.
For instance, one of the first Odel stores in Colombo has a café, a foot spa and also a gym for its members.
While touring across the city, it’s pretty much visible that there are local retailers for almost everything a person would look for including fashion and lifestyle, homeware and furnishing, auto, hospitality, entertainment and services. But what could be bettered with coming of international brands will be the quality of products.
Even though there is enough room for international brands to enter the market, the thing they need to know beforehand is that the market will only be able to offer is low volumes as the population is small and even smaller when it comes to consumers for international brands. So if you are a brand looking it higher volumes, think twice.
What consumers want?
There are no second thoughts about consumers being well educated and aware of about international brands across well developed cities. The same counts for Colombo. The consumers are very well aware of international brands and also ask for it with retailers across. The market for fashion and home products is booming as consumers become aspirational and want to have the best of their brands in their wardrobes and homes. It’s a market of aspirational youth trying to find a place for themselves among the peers.
While for the travelers or tourists, the market offers quality products and soveniers for them to take home. There is nothing that market can’t offer but there is a still a gap where international players could fit in.
Why is now the right time?
With market settling down and government policies looking at a change for good, the market could be ripe enough to mark an entry but not on its own. Currently a good way of entering the Sri Lankan market is by joining hands with local brands that have created a mark of their own. These brands help you get to the right consumer in a right manner.
The country has enough retail real estate space to set up stores and also the prices a much lower as compared to Indian market. With currency being almost half the value of Indian currency, the brands will not have to make large investments to enter.